Assume Congress enacts a $500 billion increase in spending and a $500 billion tax increase to finance the additional government spending. The result of this balanced-budget approach is a:
a. $500 billion decrease in aggregate demand.
b. $500 billion increase in aggregate demand.
c. $1,000 billion increase in aggregate demand.
d. $1,000 billion decrease in aggregate demand.
b
You might also like to view...
A negative balance in the capital and financial account means the economy is
A) lending to the rest of the world. B) running a capital account surplus. C) borrowing from the rest of the world. D) importing more than it is exporting.
________ institutions are financial intermediaries that acquire funds at periodic intervals on a contractual basis
A) Investment B) Contractual savings C) Thrift D) Depository
What was the name of the plan, enacted in 2011, in which the Fed bought $400 billion worth of long-term securities while selling $400 billion worth of short-term securities?
A) Operation Go Long B) Operation Twist C) QE2 D) QE3
Price floors typically improve market efficiency
a. True b. False Indicate whether the statement is true or false